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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (38402)	6/10/2009 8:31:08 PM
From: LoneClone	Read Replies (1) \| Respond to of 194043

Severstal sweetens offer for High River Gold miningweekly.com By: Liezel Hill 10th June 2009 TORONTO (miningweekly.com) – Russian steelmaker Severstal has increased a proposed offer to buy out minority shareholders in cash-strapped High River Gold, in which it already owns more than 50%, the gold miner said on Tuesday. After receiving an improved proposal, which contemplates a C$0,22 per share cash offer, a special committee of High River independent directors recommended to the company's board that it negotiate a support agreement with Severstal. High River reported last month it had received a nonbinding expression of interest from Severstal, which proposed to offer C$0,18 per High River Gold share. The latest offer is a 13% premium to High River's 20-day volume weighted average price and a 33% premium to the 20-day volume weighed average price ending May 21, 2009, the day before the announcement of Severstal's previous offer. Severstal has also agreed to buy about 59-million High River shares in a private placement, at C$0,18 a share, or a total of C$10,6-million. High Rover will use the proceeds to repay a $10-million debt owed by its Buryatzoloto subsidiary, which is payable of June 12. Once the private placement closes, Severstal will hold 57,3% of High River. “The special committee believes that the combination of the offer and the private placement allows High River to address its immediate liquidity concerns while allowing shareholders an option to tender their shares at a price per share that falls within the formal valuation range prepared by an independent appraiser,” the firm said. High River is not required to obtain a formal valuation or seek minority approval for the private placement because the shares to be issued represent less than 25% of High River's market capitalisation . On April 30, High River's total consolidated debt outstanding stood at around $122-million, and the company remains in breach of financial covenants under loan agreements with Royal Gold and its own majority shareholder Severstal, which have not taken any action yet, but have reserved their rights to do so. The company produces gold from three mines in Russia and one in Burkina Faso, but has battled operational setbacks at its two new openpit gold mines: Taparko in Burkina Faso, and Berezitovy in Russia.